1.8% → 1.6%, lowered by 0.2%p… global forecast raised by 0.4%p
“Downside risk still prevails”… Inflation, 3.6% forecast, down 0.3%p
[서울파이낸스 신민호 기자] The Organization for Economic Cooperation and Development (OECD) lowered Korea’s economic growth rate this year by 0.2 percentage point from the previous 1.8%. It was also lowered to 1.6%..
This contrasts with the fact that most major countries, including the US and China, have raised their growth forecasts higher than before.
In the ‘Interim Economic Outlook’ announced on the 17th, the OECD predicted that the Korean economy would grow only 1.6% this year.
Considering that 1.8% was proposed in November last year, this is a 0.2 percentage point decrease in four months. The OECD continues to lower Korea’s growth rate projections for this year in June (2.5%), September (2.2%), and November (1.8%) of last year.
It is at the same level as the forecast for Korea’s economic growth rate this year recently presented by the Bank of Korea, and is lower than that of the Korea Development Institute (KDI, 1.8%) and the International Monetary Fund (IMF, 1.7%). It is higher than the Asian Development Bank (ADB 1.5%) and Fitch (1.2%).
The OECD’s forecast for global economic growth this year was 2.6%, up 0.4 percentage point from the previous forecast.
This year’s growth forecast for the United States was raised from 0.5% to 1.5%, China from 4.6% to 5.3%, and the Eurozone from 0.5% to 0.8%. However, Japan’s growth forecast was lowered by 0.4 percentage point from 1.8% to 1.4%.
Among the 20 major countries (G20), only eight countries have their growth forecasts lowered this year: Korea, Turkey (3.0% → 2.8%), Argentina (0.5% → 0.1%), and Japan (1.8% → 1.4%).
In its report, the OECD said, “There are positive signs such as improving business and consumer sentiment, falling energy and food prices, and a complete reopening (resumption of economic activity) in China, and the global economy will recover moderately this year and next and inflation will gradually slow. will,” he predicted.
However, the report said, “As shown in the Silicon Valley Bank (SVB) crisis, sharp fluctuations in market interest rates and bond prices can expose financial institutions’ business models to higher maturity risks.” It is still on a weak foundation and downside risks are more dominant.”
Korea’s growth rate for next year is 2.3%, up 0.4 percentage points from the previous forecast (1.9%). The global economic growth rate (2.9%) next year was also revised up by 0.2 percentage point from the previous forecast.
The OECD said, “There are positive signs such as improving business and consumer sentiment, falling energy and food prices, and China’s complete reopening (resuming economic activity).” It is expected to offset the impact of financial conditions.”
The forecast for Korea’s inflation rate this year was lowered by 0.3 percentage point from 3.9% to 3.6%. This figure reflects the slowdown in global growth, monetary tightening in major countries, and the stabilization of energy prices.
The inflation rate for next year is 2.4 percent, up 0.1 percentage point from the previous forecast.
“Inflation will slow in almost all G20 countries over the next two years, but inflation will remain above target in most countries next year,” the OECD said.
Regarding monetary policy, the OECD pointed out that additional interest rate hikes in the US and the eurozone are still necessary, saying, “The stance of monetary tightening must be continued until signs of easing inflationary pressure become clear.”
The government also judges that the Korean economy has entered a slowdown phase.
The Ministry of Strategy and Finance analyzed in the ‘Economic Trends March (Green Book)’ released on the same day that “the pace of domestic demand recovery is slowing down, and the trend of economic slowdown continues, such as sluggish exports and contraction of business sentiment.” The government also diagnosed the Korean economy as slowing in the Green Book last month, and made the same judgment for the second month.
Lee Seung-han, head of the economic analysis department at the Ministry of Strategy and Finance, said, “The slump in exports was the decisive factor in diagnosing the economic slowdown.
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